Latest victim of the oil price rollercoaster ride were the farmers of central Anatolia: the prices for donkeys increased within one year from 26 to 180 Euro, which implies a price advance of 558 %. According to the Turkish newspaper Zaman the amount of traded donkeys was doubled in the Yozgat region. In the village of Lök almost all farmers changed to donkeys as preferred transportation vehicle, because Diesel is not longer affordable for the locals.
The sudden increase of oil prices shocked the Chinese economy, American consumers are praying for lower gas prices and U.S. airlines expect losses of 10 billion Dollar.
When you have a look on the news from India, you get the feeling that we are just at the start of a much bigger problem: During autumn Tata motors launches the “Nano”, a full operational car sold for 1500 Euro (click here to see a earlier blog entry). This could become a similar success story as the Tin Lizzy, the legendary Ford success story of the last century. And this means that the daily need for oil will increase even more, as also the Chinese, the Indians, the Brasilians, the people of all the emerging economies have the same need for mobility as the Europeans, the Japanese or the Northern Americans.
The question is: are the current prices only a peak, caused by wild traders at the stock exchange? Are they the herald of a long term development? And what are the consequences for purchasing?
I will figure out in a small series on purchasing transformation, how the fear about peak oil influences the oil price, how this could influence power supply and logistics and what mid-term strategies purchasing departments could consider.
June 13, 2010 at 5:21 am
I believe that peak oil is accurate and that we are now past the point of peak oil. I understand many of the current events have to do with this senerio and it won’t be long before the main stream media and population wake up and understand what is going on. For me and my family, we are preparing for the life after the crash.